China was one of the few economies globally that grew in 2020, despite the challenges posed by the Covid-19 pandemic. Official data show that the Chinese economy grew 2.3% last year, and the International Monetary Fund projects an 8.1% growth for China this year.
Meanwhile, the U.S. economy contracted 3.5% in 2020, the latest government estimates showed. The IMF said the US economy could grow 5.1% this year.
Concerns about China’s growth
In a report published earlier this month, Qiao addressed the common concerns that would hinder China from its economic goals for 2035. She listed three reasons that skeptics often cite:
- China’s aging population will hamper its potential growth.
- China’s high debt-to-GDP ratio will threaten economic stability.
- The country’s investment-driven growth model is not sustainable and cannot drive long-term growth.
These concerns will slow – but not derail – China’s overall growth path, according to the report.
Especially because the government has some policies in place to address the challenges, the report said. The measures include those aimed at debt stabilization and initiatives to boost urbanization and the opening up of the service sector.
Still, China’s journey to its 2035 target is not without risks, Qiao told CNBC. She said that even if China carries out the reforms as promised, there are many factors that the country cannot control.
The economist cited new tensions between Washington and Beijing as a possible threat to China’s economic growth.
“Will this relationship remain sweet and … peaceful? We are not so sure,” she said.
U.S.-China tensions increased during the term of former President Donald Trump and became one of the biggest threats to the global economy before the Covid-19 pandemic.